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April 05, 2011

Everybody and their sister spreading Rays contraction rumors

Here we go again: Now it's Forbes magazine's Michael Ozanian, of all people, who's spreading rumors about the Tampa Bay Raysbeing targeted for contraction if they don't get a new stadium:

Groundswell building in Major League Baseball to dump the Tampa Bay Rays. From what I am hearing, I doubt there will be any baseball at Tropicana Field after 2014 even though the team's lease runs to 2027.

What makes this bizarre is that Ozanian is the main guy behind Forbes' baseball team valuation numbers, so he of all people should know that the Rays are far too valuable an asset to just be tossed in the fireplace. As I wrote today over at Baseball Prospectus (subscription required for this one):

The Rays and A's combined are worth $638 million, up $27 million from the year before, and who in their right mind liquidates an asset that keeps gaining in value without even trying? Stuart Sternberg may be trying to scare St. Petersburg into letting the team open stadium talks with Tampa by dropping contraction threats—at least I think that's what his latest oblique statement about "my patience is greater than Major League Baseball's" was meant to threaten—but the numbers still don't pan out.

Noah Pransky of Shadow of the Stadium adds that Ozanian's conclusions were based largely on the Rays' subpar TV contract — except ratings are way up, and the contract is set to be renegotiation in 2016. Which means that unless Desmond Jennings and Wade Davis turn into total bombs — or cable has been supplanted by wrist-implanted iPads by then &mdash the Rays should be seeing a large cash windfall at that time.

Finally, note that Ozanian provides no sources, which means it's presumably somebody within MLB who's leaking this information (or disinformation, as the case may be). I think we can call it as official: Bud Selig and his henchmen are getting an early start on collective bargaining threat season. And if it helps shake down the Tampa Bay area for stadium cash, all the better.

It's effectively an admission that the Rays know they can't get out of their lease without paying. Anyone really think Pirates owner Bob Nutting is going to vote to spend money to contract the Rays (buy out Sternberg and the city of Tampa)? I don't. And I bet he'll have lots of company on that front amongst his ownership pals. Even though Baseball is one of the few sports where contraction might make financial sense (assuming the national TV rights fees are locked in, regardless the number of teams in the majors), I don't see them doing it. Telling other owners they have to pay 3-4x what they received to issue a team just to eliminate it? Nope. And that assumes that the MLBPA would go along, when I think we all know they absolutely won't.

But it's not all good news, of course. With each passing day, Sternberg sounds more and more like Jeff Loria...

Posted by john bladen on April 5, 2011 04:08 PM

I heard some interesting stuff on sports talk today here in Tampa. I was listening to the Steve Deumig show on 620 WDAE. Apparently, a blogger (affiliated with Forbes up in NY) mentioned in his article ( a few days ago) that the Rays were being contracted. So, they get the guy to call into the show and Steve asked for proof, sources, etc...The guy really had nothing to say other than it was because of attendance (which we know isn't true, owners don't care about attendance, it's just an excuse to get a stadium) Steve pressed him more and then he got mad and hung up. It was pretty funny. Not only that, his "blog" isn't necessarily one that cites things properly. His style of writing reflects that he's more about creating controversy than offering "food for thought."

It's hard to tell what Ozanian was or wasn't saying, to be honest, because Duemig was too busy making an ass of himself to let Ozanian get a word in edgewise.

Posted by Neil deMause on April 5, 2011 04:53 PM

all this is reminiscent of the national lampoon magazine cover -
"IF YOU DON'T BUY THIS MAGAZINE, WE'LL KILL THIS DOG".
of course, that had a humorous intent unlike the current "joke" (mlb threats) propagated by chief clown bud-dy and his henchmen.

Posted by Paul W. on April 5, 2011 05:51 PM

Does that $638M value of the A's & Rays include their cuts of the annual revenue sharing? Cut that out & their value goes down as well?

Posted by Mark on April 6, 2011 11:36 AM

Yes, so you'd reclaim that money (maybe $30m a year each) and redistribute it to the rest of the league, mostly the lower-middle-class teams that would newly fall into the "payee" category. But you'd also lose 100% of the revenues that the teams themselves generate (Rays fans watch Fox like the rest of us), so from a revenue perspective, I still don't see a big windfall. But I'll see if I can do a more exhaustive revenue analysis for a future item.